This post will review four Canadian ESG funds and ETFs. A friend of mine wants to add a global equity fund to his investment portfolio. But since he already has an Asian ex Japan fund, he wants to add an international equities fund ex United States & Canada. What makes his search for an international equities ESG fund or ETF more challenging is his Investment Policy follows fairly strict ESG and sustainability criteria.
At first glance, there didn’t seem to be too many Canadian based ESG mutual funds or ETFs that meet his sustainable investment criteria, but I did find four funds (some mutual funds and one ETF) that I will review below.
Keep in mind that my friend’s sustainability screen avoids investing in the following activities: oil & gas, mining, coal & gas fired power, tobacco, weapons, junk food, plastics. Let’s see if he could invest in any of the funds I will review below.
Greenchip Global Equity Fund
The Greenchip Global Equity Fund (symbol ECO100) benchmarks to the MSCI World Index. The geographic allocation of the fund is about 1/3 in each of Europe, USA/Canada, and Asia, with about 10% in cash at the time of writing based on this fund fact sheet.
The MER is 1.5% with 10% of the profits above a 6% hurdle, so its kinda expensive, but pretty average for a fund of this kind, and certainly cheaper than 2 & 20. The portfolio has a few utilities in it, and the top holdings are solar companies. Without doing any further analysis, it looks like the fund is suitable for my friend based on its holdings.
Russell Investments ESG Global Equity Pool
The Russell Investments ESG Global Equity Pool (symbol FRC163) looks like a fund of funds, with sub managers. The MSCI World Index is the benchmark. It looks like this fund holds a large number of securities that include the biggest global names that meet the sustainability criteria. No company on their top holdings list seems to go against my friend’s sustainability screen. But the portfolio does include lots of American stocks, which my friend wants to avoid since he already has a few US equities managers.
The MER is pretty expensive at 2.32% according to their fund fact sheet.
AGFiQ Global ESG Factors ETF
The AGFiQ Global ESG Factors ETF (symbol QEF) is a lot cheaper than the mutual funds reviewed in this post. The MER is only 0.45%. But the portfolio also holds a bunch of American stocks, which is not what my friend is looking for.
Mackenzie Global Leadership Impact ETF
The Mackenzie Global Leadership Impact ETF (symbol MWMN) has an MER of 0.63%, so its a lot cheaper than most mutual funds. The portfolio benchmark is the MSCI World Total Return index to Canadian dollars. This fund has some fund of fund characteristics, as the top two holdings are actually other funds offered by Mackenzie.
Also, since the benchmark is global equities, there are a lot of big American stocks in the portfolio.